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Press Release

United States Recovers Over $130,000 Resolving Allegations that Federal Gas Lessee Violated the False Claims Act

For Immediate Release
U.S. Attorney's Office, District of Colorado

DENVER -- The United States Attorney for the District of Colorado, Bob Troyer, today announces the recovery of $130,752 to settle allegations that two companies, Sanders Oil & Gas, LLC and Sanco Operating Company, violated the federal False Claims Act by failing to pay money owed to the Department of the Interior’s Office of Natural Resources Revenue (ONRR) for natural gas produced from a federal lease located in New Mexico. 

Federal lands can be leased for the production of natural gas in exchange for the payment of royalties on the value of the gas that is produced, among other obligations.  Each month, companies with federal leases are required to report to ONRR the amount of royalties due and then pay the amount owed. 

The settlement announced today resolves claims by the United States that Sanders and Sanco failed to report any production or pay any of its royalty obligation to the United States for gas produced from the Mesa Diablo lease in New Mexico from September, 2010, through December, 2016.  The United States further alleged that although Sanders and Sanco paid some money for gas that was produced from that lease between January, 2010, and August, 2010, they owed additional royalties and had failed to pay the full amount that was due during this 9-month period. 

“Gas companies that cheat on royalty payments are going to get caught.  Our office is systematically ensuring that they pay what they owe for resources they take from federal lands.  These are resources owned by all Americans, and we won’t tolerate the failure to pay for them,” said United States Attorney Bob Troyer.   

“The obligation to pay federal mineral royalties is essential to the responsible development of oil and gas from public lands, and the OIG is committed to work with DOJ and its federal partners to ensure that companies developing public resources meet their legal responsibilities,” stated Ron Gonzales, Special Agent in Charge of the Department of the Interior-Office of Inspector General’s Energy Investigations Unit.

“The Bureau of Land Management takes its oversight responsibilities seriously, and will work diligently with our partners to hold liable those companies that fail to meet their legal and regulatory commitments,” said Shannon Tokos, Acting Deputy Director of the BLM’s Office of Law Enforcement and Security.

The United States Attorney’s Office acknowledges the cooperation and teamwork demonstrated by governmental entities involved in today’s recovery. Special thanks are extended to the Office of Natural Resources Revenue, the Department of the Interior’s Office of the Solicitor, the Energy Investigations Unit of the Department of the Interior’s Office of Inspector General, and the Special Investigations Group of the Bureau of Land Management.  The United States Attorney’s Office in Denver, Colorado works closely with these offices in the pursuit of unpaid or underpaid oil and natural gas revenue, claims for which are processed at the Office of Natural Resources Revenue at the Federal Center in Lakewood.

The United States was represented in this matter by Assistant United States Attorney Amanda Rocque and former Special Assistant United States Attorney Marisela Sandoval.


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Updated April 10, 2018

False Claims Act